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Leases | 12 Months Ended
--- | ---
Mar. 31, 2026
Leases [Abstract] |
Leases | Leases Description of Leases The significant majority of our lease obligations are for real property. We lease numerous facilities relating to our operations, primarily for office, manufacturing and warehouse facilities, as well as, from time to time, both long-term and short-term employee housing. Leases for real property have terms ranging from month-to-month to ten years. We also lease various types of equipment, including vehicles, office equipment (such as copiers and postage machines), heavy warehouse equipment (such as forklifts), heavy construction equipment (such as cranes), medium and light construction equipment used for customer project needs (such as pipe threading machines) and mobile offices and other general equipment that is normally associated with an office environment. Equipment leases generally have terms ranging from six months to five years. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. We do not have any significant leases that have not yet commenced but that create significant rights and obligations for us. We lease temporary power products produced by our Thermon Power Solutions Inc. (“TPS”) division to our customers on a short-term basis. Lease contracts associated with such rental of the temporary power products have historically been month-to-month contracts without purchase options. No lease contracts in which the Company was the lessor have had an initial term in excess of one year. We recognized revenue of $9,408, $7,197, and $8,674 in fiscal 2026, 2025, and 2024, respectively related to our rental business, which we include within our over time revenue for disaggregation purposes. Variable Lease Payments The majority of our lease agreements include fixed rental payments. A small number of our lease agreements include fixed rental payments that are adjusted periodically for changes in the Consumer Price Index (“CPI”). Payments based on an index or rate such as CPI are included in the lease payments based on the commencement date index or rate. Estimated changes to the index or rate during the lease term are not considered in the determination of the lease payments. Options to Extend or Terminate Leases Most of our real property leases include early termination options and/or one or more options to renew, with renewal terms that can extend the lease term for an additional one to five years or longer. The exercise of lease termination and renewal options is at our sole discretion. If it is reasonably certain that we will exercise such renewal options, the periods covered by such renewal options are included in the lease term and are recognized as part of our Right of Use ("ROU") assets and lease liabilities. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term unless there is a transfer of title or purchase option reasonably certain of exercise. Discount Rate The Company's leases generally do not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease within a particular currency environment. A large concentration of the Company's operating lease liabilities are attributed to our US-LAM operations. Our EMEA operations and Asia Pacific ("APAC") operations have limited borrowing needs and rely on cash from operations. However, the U.S. operating subsidiary can make intercompany loans if necessary from its available credit capacity given the more preferential rates available to our U.S. operating subsidiary and the ease with which funds can be drawn from the debt facilities already established within the U.S. Considering this, the Company has utilized its U.S. credit facility rate as the worldwide incremental borrowing rate. During the fiscal year ended March 31, 2026, rates applicable at or close to the time of the inception of the lease were used to establish the new lease liabilities.
Lease Term and Discount Rate |  | March 31, 2026 |  | March 31, 2025
Weighted average remaining lease term (in years): |  |  |  |
Operating |  | 4.3 |  | 4.4
Finance |  | 2.9 |  | 4.8
Weighted average discount rate: |  |  |  |
Operating |  | 4.30 | % |  | 4.29 | %
Finance |  | 10.11 | % |  | 4.27 | %
Supplemental balance sheet information related to leases was as follows:
Assets |  | Classification |  | March 31, 2026 |  | March 31, 2025 |  |
Operating |  | Operating lease right-of-use assets |  | $ | 14,783 |  |  | $ | 11,192 |  |  |
Finance |  | Property, plant and equipment |  | 776 |  |  | 545 |  |  |
Total right-of-use assets |  |  |  | $ | 15,559 |  |  | $ | 11,737 |  |  |
Liabilities |  |  |  |  |  |  |  |
Current: |  |  |  |  |  |  |  |
Operating |  | Lease liabilities |  | $ | 4,473 |  |  | $ | 3,793 |  |  |
Finance |  | Lease liabilities |  | 228 |  |  | 230 |  |  |
Non-current: |  |  |  |  |  |  |  |
Operating |  | Non-current lease liabilities |  | 11,597 |  |  | 8,931 |  |  |
Finance |  | Non-current lease liabilities |  | 502 |  |  | 368 |  |  |
Total lease liabilities |  |  |  | $ | 16,800 |  |  | $ | 13,322 |  |  |
Supplemental statement of operations information related to leases was as follows:
Lease expense |  | Classification |  |  |  | Year-Ended March 31, 2026 |  | Year-Ended March 31, 2025 |  | Year-Ended March 31, 2024
Operating lease expense |  | Selling, general, and administrative expenses |  |  |  | $ | 4,709 |  |  | $ | 4,239 |  |  | $ | 3,953 |
Finance lease expense: |  |  |  |  |  |  |  |  |  |
Amortization of ROU assets |  | Selling, general, and administrative expenses |  |  |  | 194 |  |  | 165 |  | 149
Interest expense on finance lease liabilities |  | Interest expense |  |  |  | 59 |  |  | 58 |  | 28
Short-term lease expense |  | Selling, general, and administrative expenses |  |  |  | 175 |  |  | 14 |  |  | 2 |
Net lease expense |  |  |  |  |  | $ | 5,137 |  |  | $ | 4,476 |  |  | $ | 4,132 |
Supplemental statement of cash flows information related to leases was as follows:
Cash paid for amounts included in the measurement of lease liabilities |  | Year-Ended March 31, 2026 |  | Year-Ended March 31, 2025 |  | Year-Ended March 31, 2024
Operating cash used for operating leases |  | $ | 5,211 |  |  | $ | 4,574 |  |  | $ | 4,231 |
Operating cash flows used for finance leases |  | 194 |  |  | 165 |  |  | 149 |
Financing cash flows used for finance leases |  | 59 |  |  | 58 |  |  | 28 |
Future lease payments under non-cancelable leases as of March 31, 2026 were as follows:
Future Lease Payments |  | Operating Leases |  | Finance Leases
Twelve months ending March 31, |  |  |  |
2027 |  | $ | 5,007 |  |  | $ | 292 |
2028 |  | 4,031 |  |  | 292 |
2029 |  | 3,816 |  |  | 203 |
2030 |  | 1,676 |  |  | 62 |
2031 |  | 1,184 |  |  | — |
Thereafter |  | 1,720 |  |  | — |
Total lease payments |  | $ | 17,434 |  |  | $ | 849 |
Less imputed interest |  | (1,364) |  |  | (119) |
Total lease liability |  | $ | 16,070 |  |  | $ | 730 |
Leases | Leases Description of Leases The significant majority of our lease obligations are for real property. We lease numerous facilities relating to our operations, primarily for office, manufacturing and warehouse facilities, as well as, from time to time, both long-term and short-term employee housing. Leases for real property have terms ranging from month-to-month to ten years. We also lease various types of equipment, including vehicles, office equipment (such as copiers and postage machines), heavy warehouse equipment (such as forklifts), heavy construction equipment (such as cranes), medium and light construction equipment used for customer project needs (such as pipe threading machines) and mobile offices and other general equipment that is normally associated with an office environment. Equipment leases generally have terms ranging from six months to five years. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. We do not have any significant leases that have not yet commenced but that create significant rights and obligations for us. We lease temporary power products produced by our Thermon Power Solutions Inc. (“TPS”) division to our customers on a short-term basis. Lease contracts associated with such rental of the temporary power products have historically been month-to-month contracts without purchase options. No lease contracts in which the Company was the lessor have had an initial term in excess of one year. We recognized revenue of $9,408, $7,197, and $8,674 in fiscal 2026, 2025, and 2024, respectively related to our rental business, which we include within our over time revenue for disaggregation purposes. Variable Lease Payments The majority of our lease agreements include fixed rental payments. A small number of our lease agreements include fixed rental payments that are adjusted periodically for changes in the Consumer Price Index (“CPI”). Payments based on an index or rate such as CPI are included in the lease payments based on the commencement date index or rate. Estimated changes to the index or rate during the lease term are not considered in the determination of the lease payments. Options to Extend or Terminate Leases Most of our real property leases include early termination options and/or one or more options to renew, with renewal terms that can extend the lease term for an additional one to five years or longer. The exercise of lease termination and renewal options is at our sole discretion. If it is reasonably certain that we will exercise such renewal options, the periods covered by such renewal options are included in the lease term and are recognized as part of our Right of Use ("ROU") assets and lease liabilities. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term unless there is a transfer of title or purchase option reasonably certain of exercise. Discount Rate The Company's leases generally do not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease within a particular currency environment. A large concentration of the Company's operating lease liabilities are attributed to our US-LAM operations. Our EMEA operations and Asia Pacific ("APAC") operations have limited borrowing needs and rely on cash from operations. However, the U.S. operating subsidiary can make intercompany loans if necessary from its available credit capacity given the more preferential rates available to our U.S. operating subsidiary and the ease with which funds can be drawn from the debt facilities already established within the U.S. Considering this, the Company has utilized its U.S. credit facility rate as the worldwide incremental borrowing rate. During the fiscal year ended March 31, 2026, rates applicable at or close to the time of the inception of the lease were used to establish the new lease liabilities.
Lease Term and Discount Rate |  | March 31, 2026 |  | March 31, 2025
Weighted average remaining lease term (in years): |  |  |  |
Operating |  | 4.3 |  | 4.4
Finance |  | 2.9 |  | 4.8
Weighted average discount rate: |  |  |  |
Operating |  | 4.30 | % |  | 4.29 | %
Finance |  | 10.11 | % |  | 4.27 | %
Supplemental balance sheet information related to leases was as follows:
Assets |  | Classification |  | March 31, 2026 |  | March 31, 2025 |  |
Operating |  | Operating lease right-of-use assets |  | $ | 14,783 |  |  | $ | 11,192 |  |  |
Finance |  | Property, plant and equipment |  | 776 |  |  | 545 |  |  |
Total right-of-use assets |  |  |  | $ | 15,559 |  |  | $ | 11,737 |  |  |
Liabilities |  |  |  |  |  |  |  |
Current: |  |  |  |  |  |  |  |
Operating |  | Lease liabilities |  | $ | 4,473 |  |  | $ | 3,793 |  |  |
Finance |  | Lease liabilities |  | 228 |  |  | 230 |  |  |
Non-current: |  |  |  |  |  |  |  |
Operating |  | Non-current lease liabilities |  | 11,597 |  |  | 8,931 |  |  |
Finance |  | Non-current lease liabilities |  | 502 |  |  | 368 |  |  |
Total lease liabilities |  |  |  | $ | 16,800 |  |  | $ | 13,322 |  |  |
Supplemental statement of operations information related to leases was as follows:
Lease expense |  | Classification |  |  |  | Year-Ended March 31, 2026 |  | Year-Ended March 31, 2025 |  | Year-Ended March 31, 2024
Operating lease expense |  | Selling, general, and administrative expenses |  |  |  | $ | 4,709 |  |  | $ | 4,239 |  |  | $ | 3,953 |
Finance lease expense: |  |  |  |  |  |  |  |  |  |
Amortization of ROU assets |  | Selling, general, and administrative expenses |  |  |  | 194 |  |  | 165 |  | 149
Interest expense on finance lease liabilities |  | Interest expense |  |  |  | 59 |  |  | 58 |  | 28
Short-term lease expense |  | Selling, general, and administrative expenses |  |  |  | 175 |  |  | 14 |  |  | 2 |
Net lease expense |  |  |  |  |  | $ | 5,137 |  |  | $ | 4,476 |  |  | $ | 4,132 |
Supplemental statement of cash flows information related to leases was as follows:
Cash paid for amounts included in the measurement of lease liabilities |  | Year-Ended March 31, 2026 |  | Year-Ended March 31, 2025 |  | Year-Ended March 31, 2024
Operating cash used for operating leases |  | $ | 5,211 |  |  | $ | 4,574 |  |  | $ | 4,231 |
Operating cash flows used for finance leases |  | 194 |  |  | 165 |  |  | 149 |
Financing cash flows used for finance leases |  | 59 |  |  | 58 |  |  | 28 |
Future lease payments under non-cancelable leases as of March 31, 2026 were as follows:
Future Lease Payments |  | Operating Leases |  | Finance Leases
Twelve months ending March 31, |  |  |  |
2027 |  | $ | 5,007 |  |  | $ | 292 |
2028 |  | 4,031 |  |  | 292 |
2029 |  | 3,816 |  |  | 203 |
2030 |  | 1,676 |  |  | 62 |
2031 |  | 1,184 |  |  | — |
Thereafter |  | 1,720 |  |  | — |
Total lease payments |  | $ | 17,434 |  |  | $ | 849 |
Less imputed interest |  | (1,364) |  |  | (119) |
Total lease liability |  | $ | 16,070 |  |  | $ | 730 |

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- Definition The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-20/tableOfContent + Details
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